Scenario 2.6 You Currently Purchase a Part Used in Your Production Process

question 222

Multiple Choice

Scenario 2.6
You currently purchase a part used in your production process from an outside supplier,and have decided to begin making this part in-house.You have two equipment options for moving production in-house: special-purpose equipment and general-purpose equipment.Cost information for these two options is as follows:

-Use Scenario 2.6 to solve this mystery.At an annual requirement of 40,000 units,what does the company save per year by selecting the low-cost option?

• A)$150,000
• B)$300,000
• C)$50,000
• D)$40,000

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